The Asian Development Bank (ADB) will provide $450 million in financing to help Cambodia and Sri Lanka cushion the economic impact of the conflict in the Middle East, as rising energy prices and global uncertainty place increasing pressure on vulnerable households and national economies across Asia and the Pacific.

ADB President Masato Kanda said no family should be driven deeper into poverty because of a conflict taking place thousands of kilometers from their homes.

"No family should be pushed deeper into poverty by a conflict thousands of kilometers away. We are moving quickly to protect more than 1 million struggling households in Cambodia while helping Sri Lanka create jobs, attract investment, and expand trade. These investments will help both countries withstand today's pressures and emerge stronger from the next shock," Kanda said.

 

The financing package combines immediate crisis-response measures with longer-term economic reforms. It includes a $250 million loan for Cambodia's Rapid Intervention for Stabilization of the Economy (RISE) Program and a $200 million policy-based loan for Sri Lanka's Trade, Investment, and Industry Development Program.

In Cambodia, the RISE Program will finance temporary and targeted fiscal measures aimed at stabilizing the economy while safeguarding planned social expenditures in the 2026 national budget. The program will also promote investment in clean energy technologies.

According to ADB, more than one million poor households registered under Cambodia's IDPoor program will receive income support, including at least 350,000 women-headed households. Assistance will also include debt relief measures and support for agricultural inputs to help rural communities cope with rising production costs.

ADB said its $250 million loan will be complemented by financing of up to $250 million from the Asian Infrastructure Investment Bank (AIIB) and up to $188 million from the Japan International Cooperation Agency (JICA), bringing the total financing package for Cambodia's RISE Program to as much as $688 million.

For Sri Lanka, ADB's $200 million policy-based loan includes $100 million in additional financing designed to help the country absorb economic pressures stemming from the Middle East conflict.

The program will support reforms to modernize trade systems, strengthen the competitiveness of small and medium-sized enterprises (SMEs), and attract investment into economic zones. ADB said the reforms are expected to help businesses expand exports, integrate into regional and global value chains, create jobs, and promote private sector-led economic growth.

The bank added that diversifying exports and improving competitiveness would strengthen Sri Lanka's resilience against future external economic shocks.

The announcement comes as many economies across Asia continue to face mounting risks from geopolitical tensions, supply chain disruptions, and volatile energy markets.

Founded in 1966, the Asian Development Bank is one of the region's leading multilateral development institutions, supporting sustainable, inclusive, and resilient development across Asia and the Pacific. The institution is owned by 69 member economies, including 50 members from the Asia-Pacific region, and works with governments and development partners to finance infrastructure, strengthen economic resilience, and improve livelihoods.